Why do you invest in the Fixed deposit?
- Fixed interest (7–8%)
- Almost No Risk
- Stress-Free Investment.
Why Stress-Free? Because you don’t have to check your investment value again and again. You invested and forgot for the desired tenure.
But, I say COAL India would be a better investment for you.
Let’s invest 30,000 Rs. in FD and COAL India each. (Tenure 1 Year)
1. Fixed Deposit :
Initial Investment: 30,000 Rs.
Maturity Amount: 32,175 Rs. (FD Rate 7.25%)
Interest received: 2175 Rs.
In case of FDs, banks deduct tax at source (TDS) at the rate of 10 per cent if the interest income for the year is more than Rs 10,000. If the person has not provided his or her permanent account number (PAN), bank will deduct TDS at the rate of 20 per cent.
2. Coal India: (Current Market Price: 265.30 Rs)
Initial Investment: 30,000 Rs.
Total Stocks: 113 Stocks.
Average Dividend from last 3 years: 26.56 Rs. Per Share
(Already given 16.5 Rs. per share dividend in 2018)
Dividend received per year: 26.56*113 = 2888.28 Rs.
Your less volatile Principle is always with you as your long-term investment.
The biggest advantage is, FD has TDS but Dividend received from an Indian company is exempt from tax. Since the company declaring such dividend already deducts dividend distribution tax before paying you.
Why COAL INDIA only?
- Coal India is a better investment among all PSUs and has been profitable.
2. Return of Equity is massive 35.38% ( As compared to industry average of 10.11%). ROCE and ROA are also better.
3. Safe: Indian Government has 78% stake.
Imagine how much money Indian Government makes every year from Coal India. 4,861,680,228*25.56= 124,264,546,628 Rs. Dividend per year.
4. Big Mutual Funds houses like HDFC increased their holdings upto 150%.Holding Crores of stocks.
5. It can easily pay its interest expenses as Interest Coverage Ratio is 53.76.
6. Almost No Debt.
7. Pledged percentage: 0.00 %
8. Working capital: 23,652 Cr.
9. OFS opportunities every year.
10. Improved Sales numbers.
So, in short, Fixed income, Almost No Risk Stress-Free Investment.
One of the primary benefits of investing in the equities is the chance to grow your money. Over time, the stock market tends to rise in value, though the prices of individual stocks rise and fall daily. Investments in stable companies that are able to grow tend to make profits for investors.
#HappyInvesting
Thanks!
Akshay Seth | Research Analyst (SEB Regd.) | invest@equityboxx.com
http://www.linkedin.com/in/akshay-seth-1b7a1668
Telegram: t.me/equityboxx
Attend Stock Market Leaning Workshop in Mumbai.(Mithibai College).
Book your seat here: http://equityboxx.com/workshops
Major Topics: Stock Market Introduction, Terms and Jargons, Stock Fundamentals Analysis ( Balance sheet Analysis, PL statement Analysis), Financial Ratios, Major Corporate Actions, Stock Technical Analysis ( 5 methods), Forecasting of future price of the stock, Different Valuation methods of the company, Risk Management, Taxation, Derivatives (Basics) — Options and Future trading.
Everything you need to know about Indian economy is here. (In layman's term) 